By Scott Wright
DELTIC Energy has underlined the potential of the Pensacola and Selene prospects in the Southern North Sea it is developing with Shell, declaring they could be “enormously valuable” as the UK grapples with the current energy crisis.
And the company, which is preparing to strengthen and diversify its portfolio in the UK’s forthcoming 33rd offshore licensing round, insists the “future of UK North Sea natural gas is looking very good”.
Deltic has secured farm-out agreements with Shell and Edinburgh-based Capricorn Energy, formerly Cairn Energy, for previously overlooked prospects in the Southern North Sea. The potential of such prospects has come into the spotlight in the wake of Russia’s war in Ukraine, which has elevated gas prices and highlighted the UK’s reliance on energy imported from abroad.
Deltic reported yesterday that it has maintained a strong balance sheet with cash of £7.6 million as of June 30, down from £11.1m, following significant investment in preparatory works for the Pensacola well, adding that it remains fully funded for the project. Drilling on the “potentially transformational” well is due to start in October, with Deltic targeting 309 billion cubic feet (BCF) of natural gas.
The company has also recently committed to a “second potentially company-making exploration well” with regard to Selene, which contains an estimated 318 BCF of natural gas. “In the current environment of high energy prices and with ongoing security of supply issues these two prospects will be enormously valuable if successful,” Deltic said.
The Deltic-Capricorn joint venture is making “significant progress” on five Southern North Sea licences. Shares closed down 4.9% at 3.64p.
Chairman Mark Lappin said: “The future of UK North Sea natural gas is looking very good: not only is this domestic resource a good investment, but it is also a great way to provide skilled UK jobs; to deliver much needed income to the UK Treasury; and to ensure secure domestic supplies of energy whilst minimising greenhouse gas emissions compared with imported volumes. Climate change is a major threat and must be countered by a number of means including natural gas.”
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